Spring Budget 2017: Expectations

Chancellor Philip Hammond will deliver his first Spring Budget 2017 this afternoon.

With the process of triggering Article 50 fast approaching, the chancellor’s statement could set out the government’s direction as the country prepares for Brexit.

Commenting ahead of the speech, the Confederation of Business Industry has called on the government to use the Spring Budget to prioritise stability and show support for businesses and regions in order to prosper as a nation.

Here are some measures that have got the commentators speculating:

Business rates

The British Chambers of Commerce (BCC) quarterly economic survey found that 39% of businesses are more concerned about business rates than 3 months ago, with a further 50% of smaller businesses saying it is of greater concern.

Dr Adam Marshall, director general at BCC, said:

“In the short-term, the government must provide additional relief to the firms hit hardest by rates and re-visit the detail of reform to the appeals system.”

Stamp duty

The proportion of first-time buyers paying stamp duty last year rose to 74%, according to Yorkshire Building Society.

26% of properties bought by first time buyers in 2016 were worth under the tax threshold of £125,000, down from 47% in 2006.

Andrew McPhillips, chief economist at Yorkshire Building Society has called for stamp duty to be reformed in the Spring Budget:

“Levying the charge against sellers rather than buyers will help to reduce costs for first-time buyers, helping more people to get on the property ladder.”

VAT

Frank Woods, retail sector specialist at NFU Mutual has said that a VAT cut by just 5% could encourage more consumer spending, providing an extra £547 a year.

“While the overall Spring Budget is expected to support growth, any boosts such as a cut in VAT could also be offset by increases in other taxes, meaning that savings aren’t necessarily felt.”

Pensions tax relief

Steven Cameron, pensions director at Aegon has called the chancellor to provide more flexibility to the state pension and bring an end to the lifetime allowance.

“We hope the chancellor will leave the fundamentals of pension tax relief alone but end the lifetime allowance, extend auto-enrolment concepts to keep pace with the changing nature of today’s workforce and grant early access to the state pension.”